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Hit the Bulls-eye with your High Shrink Target Store Program

Posted on 2/8/11 9:23 AM

For many retailers, the first months of a new calendar year are spent preparing for and taking physical inventories within each location.  Once reconciled, the posted shrink number sums up all of the hard work and efforts over the last inventory period. For most companies, even though the overall number is good, there are some locations that continue to haunt you day and night. They are the stores predestined to be listed on your high shrink target store program.

At this point in the time, let us assume that you have already weighed all the numbers and decided which stores fall upon that target store program. If you are uncertain how best to define those locations in a target program, read our article titled, “Decrease Loss with a Target and Geographical Shrink Plan.”

Unfortunately, deciding which stores to include in your target store program is the easy part of the process. Now you are faced with the daunting task of designing a program that will actually reduce losses in those locations.  You may be asking yourself…

Will we perform more audits in these locations?

Should we conduct general loss interviews?

Will there be monthly conference calls and action plans?

Our experience in developing target store programs for various retailers, have shown us that three key elements are most common in those high shrink target store programs with greater success. They include;

Reducing Shrink Target Store Programs resized 6001. Increasing Visibility

Simple right? Some people will argue that you cannot increase visibility because of increased resources, the resultant increase in travel costs and perhaps continued burden on the store operations team. What you need to think about are the alternatives to the traditional model of “visibility.”

When visiting a store in the vicinity of a target store location, simply stop in for a 15-20 minute conversation at the target store. We at LPI call these “visibility visits” and use them regularly to check key LP program elements, talk to the staff present at that time, and create an aura that LP can stop by your location at anytime.

In lieu of a physical visit, you can perform a weekly unscheduled call to the store or monthly conference calls with all your target stores from your office. Increasing the communication or having target store conference calls allows everyone the opportunity to share ideas, learn from each other, and help build teamwork to make a greater impact.

This increase in visibility, even on a fifteen minute visit, makes a huge impact on shrink as the honest associates feel more supported and the dishonest associates begin to worry about being caught.

2. Defining Program Ownership

Regardless of the activities you include in your target store program, if the loss prevention function is the only owner of the program it is destined to fail.  Success requires not only the support but the leadership of the Operations Team.

District and regional managers hold the key to a store’s program success or failure.  An LP department can design and monitor the program; however a target store program is often not successful if driven solely by loss prevention. With Operations supporting the program and actively driving it, their clout at the store level will push the program home. 

Getting Operations to buy-in to a target store program means not developing it in the LP vacuum. Bring Operations in early, make them part of the program development, allow them a voice, and you will see the shift in ownership that brings a vested interest in the hands of Operations.

3. Building the Stigma of the Program

No store, or its employees, should want to be a target store. The store management team, and all associates at that location, should understand that their designation as a target store will equate to more work on their part.  The store should develop their own action plans, with Operations and LP support. Self-audits should be completed regularly and regular store communication with LP and Operations must take place.

A successful target store program does not simply throw a lot more work at the problem, but it does require that the right kind of work is done by those responsible and in a position to change its past.

When should a location be removed from a target store program? For many, it is the next inventory that shows an acceptable shrink improvement. Sadly, the recidivism rate for target stores is high, and one acceptable inventory does not always indicate complete reformation. Before releasing a target store “back into the wild”, make certain that store associates and management have a solid understanding of how to maintain good shrink, even if it requires a modified target store program for another inventory cycle.

Written By Kevin Griggs, Account Executive

Topics: policies and procedures, Loss Prevention program and development